Income Tax Department conducts search operations in Madhya Pradesh

RELEVANT EXTRACT 

The Income Tax Department initiated search and seizure operations on two  major business groups of Indore on 25.11.2021. The first group is engaged in the  business of mining, media and providing cable TV services and the second group is  running a coaching academy. The search action has covered more than 70  premises in Madhya Pradesh and 5 other states.

During the course of search action, various incriminating documentary and  digital evidence including parallel set of financial records of some of the businesses  have been found and seized. A preliminary analysis of these evidences show  evasion of taxable income by adopting various malpractices, particularly suppression  of sales in mining business. Similar large-scale tax evasion has been found in the  business of cable TV service. Evidences of other malpractices such as payment of  on-money, suspected benami transactions, unaccounted expenditure incurred in  cash, undisclosed investment in immovable properties, etc. have also been found.

Investigations have revealed that the group has also taken accommodation  entries in the form of bogus unsecured loans exceeding Rs. 40 crore from various  shell companies managed by entry operators. The main entry operator, the key  handler, and several dummy directors of the shell companies have been identified,  traced and covered during the search operation. The dummy directors and key  handler have admitted that the companies are merely paper entities, and they are  working at the behest of the main entry operator.

Documentary evidence found and seized from the search operation of the coaching  group clearly shows suppression of cash receipts from students which is in excess of  Rs. 25 crore. The analysis of seized evidence also indicates that this group is  systematically suppressing its royalty receipts and profit share incomefrom its  various franchisees. Unaccounted cash exceeding Rs.10 crore has been received  on such accounts. The search operations have resulted in the seizure of  unaccounted cash of Rs. 2 crore.

Further investigations are under progress.

Source – https://www.incometaxindia.gov.in/

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